GALVESTON - The Port of Galveston is now the fifth largest homeport in the U.S. when measured by embarkations. Cruise activity generated $43 million in passenger onshore spending and another $12 million in services provided in 2013, according to a report conducted by Tourism Economics for the Galveston Island Convention and Visitors Bureau.

The Port of Galveston is spending $10 million to expand its second cruise terminal — adding 60,000 sf to bring it to 150,000 sf with a seating capacity of about 1,000. The expansion is part of a five-year deal with Miami-based Royal Caribbean Cruises Ltd.

The Port of Galveston is also planning a third cruise terminal to capitalize on the booming cruise industry. An architecture firm will design the new terminal, which could be an “out-of-the-box” concept connecting all their terminals or a traditional, 150,000-sf structure in an area between piers 23 and 29.

In addition, since Galveston is already very congested when ships are in port, a third terminal would have to be accompanied by a parking garage, said Mike Mierzwa, Galveston’s port director.

However, the Port of Galveston faces new competition from the Port of Houston Authority’s Bayport Cruise Terminal. After sitting vacant since it was built in 2008, the cruise terminal began operating at the end of 2013 with Princess Cruises, which relocated from the Port of Galveston.

Bayport’s second cruise, Norwegian Cruise Lines, will start sailing this fall to the western Caribbean on the 2,374-passenger Norwegian Jewel. The Port of Houston Authority expects both cruise lines to attract more than 400,000 passengers over the next four years.